Case Study

In 2007, the Municipality of Paris enacted its first Climate Plan which outlines a series of actions to reduce the city’s greenhouse gas emissions by 75% by 2050. One of the Climate Plan’s ongoing goals is to reduce energy consumption and CO2 emissions in municipal buildings by 30% by 2020 compared with 2004 levels.

Paris’ primary and pre-schools comprise more than a quarter of all city-owned buildings. As a result, the Climate Plan created the School Retrofit Project — a specific initiative aimed at tackling energy efficiency in schools. In March 2010 the City established a dedicated team tasked with retrofitting 600 schools in order to reach the target of 65GWh of energy savings per year.

In order to guarantee the savings, all schools involved in the project are included in energy efficiency contracts (EECs). This type of contract is signed between the public authority and an energy saving company (ESCO) committed to making the savings. In the event that it fails, the ESCO is charged with the savings that have not been made.

Thus far, a first contract covering 100 schools has been passed as a private finance initiative (PFI), or a partnership contract whereby the ESCO pre-finances the initial works and starts being paid back by the public authority when all the works have been completed. This first contract was signed in December 2011 for 20 years. The ESCO is a special purpose vehicle (SPV) called NOV’ECOLES Paris and its shareholders are well-known businesses: EDF Optimal Solutions (in charge of all technical matters), la Caisse des Dépôts et Consignations and France Infrastructure (financial partners).

How does it work?

Schools are difficult buildings to tackle, as they are open to the public and occupied most of the year, and present all kinds of technical peculiarities specific to their age and construction. As a result, it is important to let the ESCO be the only one in charge of energy performance. For the first contract, which covers 100 schools, the ESCO thus conducted the pre-work studies, carried out the work and is in charge of maintenance and energy monitoring for the duration of the contract. A notable exception is that in 72 of the schools the municipal technical employees are in charge of the maintenance, although the contract required the ESCO to be in charge of training schemes for them. The ESCO was also required to provide sessions for schools’ municipal employees and pupils to raise awareness on eco-friendly measures.

The next EECs under preparation, to cover 200 more schools, are expected to pass as common procurement contracts, rather than partnership contracts. One major difference to the first EEC will be the absence of pre-financing on the part of the ESCO.

In all EECs the 30% commitment on energy efficiency is for the overall contract, which covers many schools, and not per school. The ESCO is thus able to optimise its work programme according to the different sources of energy savings in each building.

Energy efficiency is calculated by comparing the yearly results with a baseline period and by neutralising all variations that are not due to the actions of the ESCO, including weather changes, works carried out by other companies, and functional changes in schools. The framework that has been implemented for this purpose is based on the International Performance Measurement and Verification Protocol (IPMVP).

Image courtesy of the City of Paris

Results

The results expected from the first EEC (100 schools) are:

Reduction in carbon emissions by 2300 tonnes per year from 2014 to 2031;

Reduction in energy consumption by 10.7MWh (megawatt hour) per year from 2014 to 2031.

The first results on 100 schools will be known in 2015 but an intermediate result has been made public on a first group of 45 schools where works were completed in 2012. It appears that slightly more than 30% savings have already been achieved on this subgroup.

The return on investment is expected to improve in the long term as energy prices are expected to increase more steeply than the prices paid to the ESCO.

Similar results are expected for future EECs.

The first EEC has also given favourable employment opportunities to local small businesses and staff who might otherwise have difficulty entering the job market.

Next steps

New EECs are underway for 200 additional schools with first works scheduled in 2016. Another 300 schools will be retrofitted subsequently.

Application

The project is focused on Paris’s primary and pre-schools but the lessons learned could be valuable to any retrofit programme on municipal buildings.